Daily Archives: September 5, 2007

Sun Microsystems: All Sizzle, No Steak

Last week, Sun Microsystems (JAVA) changed its ticker symbol from SUNW to JAVA.

JAVA is a widely known and highly regarded programming language that Sun introduced twelve years ago. It is used on most PCs and many portable devices. But, Sun would be hard pressed to show that it made much money on the initiative.

Now, Sun is going to reverse split its stock 1-for-4. The reason the company gave according to The Wall Street Journal was "that having Sun’s stock below $10– where it has been mired since 2002 — created an inaccurate perception that the Santa Clara, Calif.-based server and software maker was still struggling to overcome its post-dot-com era slump."

Somehow Sun believes that the new ticker and higher stock price will take away customer objections to doing business with the company..

That one is hard to see.

The reason that customers do not do business with Sun is that it competes with much larger companies like HP (HPQ) and IBM (IBM) that offer a wider array of products and services. Sun showed virtually no revenue growth in the last quarter, but perhaps the new ticker will fix that.

Over the last six months, Sun’s share price is down a little under 10%. IBM and HP are both up nearly 30% during the same period.

It seems hard to imagine that the reverse split will solve that.

Douglas A. McIntyre

Posted on: September 5, 2007 – 6:22 pm in Technology Companies, , ,

Motorola Dreams On

Wall St. has to love Motorola (MOT) no matter how low its stock goes. The company’s CFO told an analyst gathering how much he liked the Apple (AAPL) iPhone touch-screen. That is the one that the media and customer praise so highly.

According to MarketWatch, the head bean counter went on to say that Motorola has marketed phones with some touch-screen controls for several years, primarily in Asia. If demand for that feature remains strong, he said, eventually "we may introduce touch-screens in the U.S."  That would be the same touch-screen that sells so many iPhones.

Maybe it has not occurred to MOT, but getting a device with a number of iPhone features on it into the US could help the company’s effort to get out of the basement in the handset business.

Mr. MOT also mentioned that "Steve Jobs and Apple did companies like Motorola a huge favor on any number of levels" by breaking down the resistance of carriers to new ideas,

A huge favor by grabbing a lot of their customers.

Douglas A McIntyre

Posted on: September 5, 2007 – 6:03 pm in Consumer Electronics, ,

Boeing: Straighten Up And Fly

Boeing (BA) is delaying the initial flight of its new 787 Dreamliner, again. It is now set for the middle of December, about three months after the planned date.

Fliers, airlines, and investors are already a little nervous. A Boeing 737 had some fire problems in Japan last week, by no one was hurt.

Reuters writes: "The new date truncates Boeing’s already shortened test flight schedule but will not delay first delivery of the plane in May next year and does not affect financial forecasts, the company said."

Boeing wants to avoid the Airbus label. Everything is late, and then it is broken when it gets there.

With over 700 orders for the new Dreamliner, another delay will cost shareholders a bundle.

Douglas A. McIntyre

Posted on: September 5, 2007 – 5:55 pm in Aerospace,

Cramer’s Retail & Apparel Calls On The Fed (PVH, PERY, RL, DLTR, GPS, AEO)

On tonight’s Mad Money on CNBC, Jim Cramer said he is adamant of a RATE CUT from the Federal Reserve and sticking his head out waiting for it.  He still thinks the way to play this is by being in best of breed and solid retail stocks, particularly since this is FASHION WEEK.  He has one play he thinks is a big buy, but there are also a couple retail stocks in fashion and apparel that you should avoid.

The one Cramer loves and thinks you should own right now is Phillips-Van Heusen (NYSE:PVH), which owns Calvin Klein.  That isn’t the only brand and isn’t the only good brand.  It licenses Kenneth Cole, DKNY, Joseph Abboud, and has IZOD, Bass, Geoffrey Beene.  He thinks this may be immune from missing estimates and will grow from the outside of the US sales.  It also has 725 outlet stores it sells through.  PVH rose 1.5% to $56.00 after the Cramer call, but shares were down 1.9% in normal trading and closed at $55.18 in normal trading.

A call-in during the first ‘avoid segment’ was actually from an overstock retail specialist, and Crameragreed that there is major discounting and overstocking going on inapparel right now.  Cramer still thinks the way to key off of goodretailers is by gaging the Fed ahead of rate cuts. In the call-insegment he was positive on Gap (NYSE:GPS), Dollar Tree (NASDAQ:DLTR),and American Eagle Outfitters (NYSE:AEO).

CRAMER’S AVOID LIST FOR NOW

Perry Ellis (NASDAQ:PERY) is a fairly unfashionable label that blew away earnings, but the quality of earnings was a beat because of cost cuts and they are a mid-tier fashion brand.  This is also the most at risk if Cramer is wrong on the rate cuts, and he’s concerned about Perry Eliis’ future.  It also gives no dividend and has no share buyback plan.

Ralph Lauren (NYSE:RL) is a best of breed clothier, and Citigroup just started it as a Buy this week.  On August 8 the earnings miss punished the stock after an earnings warning.  He said he gave the management the benefit of the doubt right before the retail stock slide happened.  Tonight Jim Cramer is saying now that he cannot recommend this one now, and he said he’s sitting on the sidelines now.  Blowing a quarter means you have to weigh the risk/reward a quarter later to make sure this isn’t a one time event.

Jon C. Ogg
September 5, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the 24/7 Wall St. SPECIAL SITUATION INVESTING NEWSLETTER and he does not own securities in the companies he covers.

Posted on: September 5, 2007 – 5:24 pm in Apparel, Cramer, , , , , ,

Stock Buybacks For September 5, 2007 (TECD, RJET, PFIN, IIG, MNST, EXC)

This is not necessarily a full list of all the buyback announcements, but this is a partial list.  Today’s buyback announcements and updates are first, and yesterday’s are listed at the end.

Tech Data (NASDAQ:TECD) announced a $100 million buyback plan, versus a $2.1 Billion market cap.  The company’s share repurchases will be made on the open market, through block trades or otherwise. The amount of shares purchased and the timing of the purchases will be based on working capital requirements, general business conditions and other factors, including alternative investment opportunities. The company intends to hold the repurchased shares in treasury for general corporate purposes, including issuance under employee equity compensation plans.

Republic Airways Holdings (NASDAQ:RJET), announced (as part of its $100 million Existing buyback plan) that it has agreed to purchase  2,000,000 shares of its Common Stock from WexAir LLC, the company’s former majority stockholder, at a price of $19.20 per share, for total consideration of $38,400,000.  RJET stock closed at $19.06 today.

P&F Industries, Inc. (NASDAQ:PFIN) announced that its Board of Directors has extended the time it may purchase shares of Class A Common Stock under its share repurchase program by an additional year to September 30, 2008. The Company is authorized to purchase up to 150,000 shares remaining pursuant to such share repurchase program.

iMergent, Inc. (AMEX:IIG), after its earnings, increased its stock repurchase program from $20 Million to $70 Million over the next 5 years.

Noven Pharmaceuticals, Inc. (NASDAQ:NOVN) today announced that its Board of Directors has approved a share repurchase program authorizing the company to repurchase up to $25 million of the company’s common stock. The repurchase program is effective immediately.

YESTERDAY’S SHARE BUYBACK ANNOUNCEMENTS

Monster Worldwide (NASDAQ:MNST) today announced that its Board of Directors has approved an increase to its share repurchase program. It is now authorized to purchase an additional $250 million of its shares of common stock in the open market or otherwise from time to time over a 12 month period, as conditions warrant.  This new authorization follows the existing $100 million share repurchase program, which has now been substantially utilized.

Exelon Corporation (NYSE:EXC) on Monday announced new guidance 2007 EPS of $4.15 to $4.30 per share. Exelon’s original operating earnings guidance range was $4.00 to $4.30. AND that its board of directors has approved a share repurchase program for up to $1.25 billion of its outstanding common stock. Exelon expects to complete the share repurchase program within the next six months.

If you would like to delve further into share buybacks we have covered you can see a partial index of what we have covered.

Jon C. Ogg
September 5, 2007

Posted on: September 5, 2007 – 4:55 pm in Stock Buybacks, , , , , ,

ETF Launched: Market Vectors-Agribusiness ETF (MOO)

The American Stock Exchange confirmed that Van Eck Global has launched its fifth ETF on Amex today.  Its name is the Market Vectors-Agribusiness ETF (Amex:MOO), and this one tracks a global group of 40 company stocks that are in Agribusiness.  More specifically, this is tied to soft commodity and bioenergy companies and every aspect around them: manufacturing, processing, refining, transporting, distributing, marketing, trading, packaging, and storing of agriproducts. 

From now on, we’ll refer to it as "The Moo," and The Moo is set to track the price and yield performance of the DAXglobal® Agribusiness Index, which is comprised of common stocks and depository receipts that are listed for trading on major stock exchanges around the world and involved in the business of agriculture. The Moo components include companies engaged in agriproduct operations, agricultural chemicals, livestock operations, agricultural equipment, and ethanol/biodiesel, and which predominantly derive at least 50% of their total revenues from such activities.

We openly endorse ETF’s, but we like to look for ETF’s with volume.  Today was day one, but it only traded 6,500 shares on the day.  Generally speaking, these international or global basket ETF’s tend to be more liquid based on how focused they are.  This one is focused on a fairly apples to apples basket in company operations and 52% of the index weighting is US-based companies, but it is diversified from a country standpoint for the other 48% and there are few investors in the US where The Moo trades that invest in DAX Indices.

Here is the full data on the DAXglobal® Agribusiness Index, including the 40 components.  Here is an abbreviated list of the 40 companies and the countries (pardon abberviations): ABB Grain Ltd. (Australia), AGCO Corp. (US), Agrium (Canada), The Andersons (US), Archer Daniels Midland (US), Assoc. British Foods (UK), Aventine (US), AWB Ltd. (Australia), Bunge (US), CH Ind. (US), China Agri-Business (HK), CNH Global NV (NE), Corn Products (US), Cresud SA (ARG.), Darling Int’l. (US), Deere (US), Gehl Co. (US), Gruma SAB (MEX), IOI Corp. (Malaysia), Komatsu (Japan), Lindsay (US), MGP Ingredients (US), Monsanto (US), Mosaic Co. (US), OLAM INT’L (Singapore), Pacific Ethanol (US), Pilgrim’s Pride (US), Pine Agritech (China), Potash (Canada), Saskatchewan Wheat Pool (Canada), Smithfield Foods (US), Syngenta AG (Switzerland), Terra Ind. (US), Tiger Brands (South Africa), Tractor Supply (US), Tyson Foods (US), UAP Holdings (US), Verasun Energy (US), Wilmar Int’l (Singapore), Yara Int’l (Norway).

Jon C. Ogg
September 5, 2007

Posted on: September 5, 2007 – 4:26 pm in ETF, , ,

Apple iPhone Price Drop: A Sign Of Weakness

Apple (AAPL) bulls like the folks at Piper Jaffray can say whatever they want. The AAPL plan to drop the price on the iPhone by $200 to $399 is a stunning sign of weakness. The old plan of losing money on every unit and making it up on volume has never worked.

AAPL CEO Steve Jobs said that "We’ve clearly got a breakthrough product, and we want to make it affordable for even more customers as we enter this holiday season."  It is better than a lump of coal in the stocking. But, Apple is talking about selling 10 million iPhones by the end of 2008. Giving up $200 on each one when the company should not have to looks like a mighty big haircut.

Cutting prices. A sign of weakness. Almost no one on Wall St. thinks otherwise.

Douglas A. McIntyre

Posted on: September 5, 2007 – 3:18 pm in Consumer Electronics,

The 52-Week Low Club

Wal-Mart (WMT) How did the world’s largest retailer get on this list? By being badly run. Down to $42.39 from 52-week high of $52.15.

Blackstone Group (BX) Which is worse, retail or the private equity business? At least the founders of both BX and WMT made billions. Where are the shareholder’s yachts? Drops to $21.96 from $38 high.

Finisar (FNSR) Tech companies are not supposed to have weak earnings reports. Drops to $2.93 from $4.25.

Sourceforge (LNUX) Online community sites. Just keeps falling. Down to $2.42 from 52-week high of $5.55.

Sourcefire (FIRE) Just sounds the same.Provides real-time network defence systems. Down to $7.96 from 52-week high of $18.83.

Douglas A. McIntyre

Posted on: September 5, 2007 – 3:11 pm in HI/LOW, , , , ,

Are XM & Sirius Closer To Merger Approval? (XMSR, SIRI)

We haven’t had a whole lot to say regarding Sirius Satellite Radio’s (NASDAQ:SIRI) acquisition of XM Satellite Radio (NASDAQ:XMSR) of late.  It’s being penned as a merger of equals, but everyone knows the truth by now.  This has been viewed as one of the most ‘in-jeopardy’ mergers out there.  The FCC has mostly been against the deal the entire way through, but this may be taking a turn for the better.  The company had an SEC filing early this morning, and here are the guts of the filing:

  • On September 4, 2007, we and XM Satellite Radio Holdings Inc. each certified to the Antitrust Division of the U.S. Department of Justice that we were in substantial compliance with its Request for Additional Information relating to our pending merger. We are continuing our cooperation with the Department of Justice in its review of this matter.
  • We continue to expect that the merger will be consummated by the end of 2007.

This sort of seems and feels like a salesperson using the assumptive close, but it is at least one more bit of confidence when you consider that the companies just a couple months ago were using much more cautious verbage in their communications.  Shares are also doing better than when we were noting them on the 52-week lows day in and day out.

This morning the companies also issued a press release with former FCC chairman Mark Fowler ‘calling for approval of satellite radio merger.’  Here is the link at the New York Sun online to see what Mr. Fowler said.  You can also access more data at SIRIUSMERGER.COM or XMMERGER.COM.

The INTRADE stats are’t showing all that much but the underlying shares are up quite strong on a down day.  SIRI shares are up over 5% at $3.17, still above that $3.00 critical mark; and XMSR shares are up 4.2% at $13.25. Options are likely too expensive for these shares because there have not been many trades in the December put and call option contracts.

There was a while where this one was looking like a do or die situation, although SIRIUS did score its $250 million term-loan recently and at one point this was lightly defended at S&P.  UBS also defended these shares a few months ago when the stocks were a hair under the price levels of today.  There are still some hurdles that the companies have to address and overcome, but this is so far being received with open arms by shareholders today.

Jon C. Ogg
September 5, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the 24/7 Wall St. Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Posted on: September 5, 2007 – 1:32 pm in Mergers and Buy Outs, Satellite, ,

IPO FILING: Rubicon Technology, Inc. (RBCN)

Rubicon Technology, Inc. has filed to come public and raise up to $100 million via an IPO under the ticker "RBCN" on NASDAQ.  UBS Investment Bank has been keyed as the lead underwriter and book-runner, and co-managers are listed as Canaccord Adams, CIBC World Markets, and Janney Montgomery Scott.

Rubicon is an advanced electronic materials provider that is developing, manufacturing and selling monocrystalline sapphire and other innovative crystalline products for Light-Emitting Diodes (“LEDs”), radio frequency integrated circuits (“RFICs”), blue laser diodes, optoelectronics and other optical applications.

The emergence of sapphire in commercial volumes at competitive prices has enabled the development of new technologies such as high brightness (“HB”) white, blue and green LEDs and highly-integrated RFICs.  The company stated that it believes it is the leading supplier of sapphire products to the LED industry.

2006 revenues were $20.752 million, and a loss before accounting changes of $4.147 million.  Its net loss for 2006 after dividends and accretion of redeemable preferred stock was $36.619 million.  As far as how it is growing now, its six-month end from 2006 showed revenues of $8.95 million and the first six-months of 2007 showed revenues of $15.448 million.  The company did manage to post $1.866 million in income from operations for the first six-months of 2006, although those accounting changes and preferred accretion caused an attributable loss of $22.992 million to shareholders.

Jon C. Ogg
September 5, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the 24/7 Wall St. Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Posted on: September 5, 2007 – 12:24 pm in IPOs, Technology Companies, , ,

Cramer Notes Apple As Fashion and H-P As Business (HP, AAPL)

On today’s videos on TheStreet.com, Jim Cramer was asked about the hoped-for iPod revamp today, but was mainly asked about how he views them compared to say H-P (NYSE:HPQ) and Dell (NASDAQ:DELL).  Cramer said as "the computer play" for business is H-P and Apple (NASDAQ:AAPL) is actually more of a fashion play.  He noted it is great technology, but nonetheless he thinks there is somewhat of fashion play.  Apple is one of his NEW FOUR HORSEMEN OF TECH that he gave early on in summer.  He thinks that Apple will have to keep its torrid pace up, but as long as they can reinvent themselves then they’ll remain a hot fashion.

Hewlett-Packard is a business play more than anything else, and he called it a business statement with $100+ Billion in revenues.  Cramer doesn’t believe that these two can cross over all that much, and he hasn’t seen Apple really get into businesses that much. This is also after Cramer interviewed H-P’s CEO Mark Hurd on CNBC’s MAD MONEY last night.

I’d add in there that Apple actually has penetrated business, but it hasn’t penetrated into large corporate environments and has essentially no penetration anywhere close to Wall Street.  It is used by small and individual businesses that aren’t tied to financial dealings and it is quite popular among anyone tied to fashion, design, marketing, and the like. 

Keep in mind that this is meant as more of a "fashion statement" reference rather than as true fashion.  Cramer didn’t really address Dell in his video commentary.

Jon C. Ogg
September 5, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the24/7 Wall St. Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Posted on: September 5, 2007 – 11:49 am in Cramer, , ,

Constant Contact IPO Closer (CTCT, MS)

Constant Contact is now closer to coming public as it has an amended S-1 filing with the SEC, and it has the proposed ticker of "CTCT" on NASDAQ (NASDAQ:CTCT).  The company originally filed in early July to come public.  The joint book-runners are CIBC World Markets and Thomas Weisel Partners; co-managers are listed as William Blair, Cowen & Co., and Needham & Co.   

Constant Contact helps small to large companies run email campaigns:  As of July 31, 2007, it had over 130,000 customers (up from 25,000 at the end of 2004) for permission-based email marketing campaigns.  In June 2007, it introduced an online survey product to complement email marketing.  "CC’s" top 50 email marketing customers accounted for approximately 1% of gross email marketing revenue. Customers pay a monthly subscription fee that generally ranges between $15 per month and $150 per month based on the size of their contact lists and, in some cases, volume of mailings. For the first half of 2007, its average monthly revenue per email marketing customer was approximately $33.  Retention rates look strong as it noted that from January 2005 through July 2007, 97.4% of its customers in a given month have continued to utilize our email marketing product in the following month. Since the first quarter of 2002, "CC" achieved 22 consecutive quarters of growth in customers and revenue.

In fiscal 2006, revenue was $27.6 million and its net loss was $7.8 million.  In the six months ended June 30, 2007 revenue was $21.1 million and its net loss was $5.5 million.

This is not large enough to be a ‘Backdoor Play’ into Morgan Stanley (NYSE:MS) nor is it enough to create a "Special Situation" opportunity, but entities affiliated with Morgan Stanley Dean Witter Venture Partners own over 4.65 million shares (almost 22% of the company).

Jon C. Ogg
September 5, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Posted on: September 5, 2007 – 10:29 am in IPOs, Internet, , , ,

lululemon’s Quiet-Period Ends: Research Initiations (LULU)

lululemon athletica Inc. (NASDAQ:LULU) has been quite a performer based on its recent IPO performance. The indicated range was $15.00 to $17.00, but the company sold 18.2 million shares at $18.00 per share.  Since the IPO, shares have traded as high as $38.85.

This morning, we are getting to see the analyst call initiations as the quiet-period has ended:

Goldman Sachs and Merrill Lynch were the lead underwriters.  Goldman Sachs initiated coverage with a "Buy" rating and a $40.00 target.  Merrill Lynch has started coverage with a Neutral rating.

Here are the co-manager calls and outside calls:

CIBC started coverage with an "Outperform" rating.

Wachovia started it with a "Market Perform" rating.

William Blair started coverage with an "Outperform" rating and an Aggressive Growth company profile.  Analyst Sharon Zackfia estimated that the company, which retails its yoga-inspired athletic apparel through company-owned boutique-style stores, would earn $0.29 per share in 2007, $0.46 per share in 2008, and $0.71 per share in 2009.

RBC Capital Markets, which was not in the underwriting and thus exempt from the quiet period rules, started coverage all the way back at the end of July with an Outperform rating.  Shares closed at $28.00 that day, on its IPO day.

Other co-managers were UBS and Thomas Weisel, and we haven’t seen those reports yet.

If you will recall, it was just about a month ago that Jim Cramer noted this one as having some of the same characteristics of under Armour (NYSE:UA).  Shares had closed at $31.00 that day, and shares are down 2% at $34.15 on the day, now.  it seems that based on the mixed coverage and on the targets that investors may be waiting for this one to cool down before they chase it further.

Last month’s short interest in August was listed as 2.011 million shares.  The company said it will report earnings on Monday, September 10, 2007, after the market close.

Jon C. Ogg
September 5, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Posted on: September 5, 2007 – 10:04 am in Analyst Calls, Apparel, , ,

Boston Stock Exchange Closing Electronic Stock Exchange

The Boston Stock Exchange (The "BSE") has announced that it has discontinued the operations of the Boston Equities Exchange ("BeX"), whch is the exchange’s electronic stock exchange launched in August 2005. The BSE claims that it will continue to be active in the marketplace and will support its remaining ventures including the regulation of the Boston Options Exchange (BOX).  BeX is one of several ventures launched by the BSE over the past three years.

While this venture struggled to gain market share in large part due to the overall strength of market incumbents, the BSE claims that the other ventures have continued to be successful. The BSE says that LeveL, its dark-book alternative trading system, which was originally incubated by the BSE, is experiencing dramatic growth and plans to expand its operations.

“We are disappointed that BeX was not able to become competitive in today’s marketplace and perform as well as other ventures of the Boston Stock Exchange, but we want to emphasize that the BSE remains a committed member of the National Market System,” said Boston Stock Exchange Chairman and CEO, Michael Curran.

The Boston Stock Exchange and the various ventures have a total of approximately 100 employees and this cessation will affect approximately forty employees: some will be reassigned to other ventures, some will remain on through the transition and those whose positions were eliminated will receive severance packages.

As the exchange wars heat up and as the competition gets more fierce, these regional players have to focus on their strengths rather than bringing on wider areas for a broader scope where they are outgunned from day one.  Speaking of which, where is that darned American Stock Exchange IPO?

Jon C. Ogg
September 5, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Posted on: September 5, 2007 – 9:21 am in Exchange,

What We Expect From Apple Today (AAPL, MSFT, CREAF)

Apple Inc. (NASDAQ:AAPL) is trading up marginally ahead of the technology analyst and press conference in San Francisco, but the stock is currently back within about $4.50 of its all-time highs.  What is being pushed around all over Wall Street and Main Street alike is a new revamped and souped up iPod.

We’ve already gotten the iPhone, we’ve already seen new PC announcements, we’ve already been given the delayed launch date of the Leopard operating system, and we are still viewing the TV initiative as a hobby as Steve Jobs called it himself.  Unless Apple is going to shock the you know what out of everyone with a new unknown and undiscovered product, this iPod revamp makes more than perfect sense.  Consumers want it too.

Back in April, Apple said it had sold its 100-millionth iPod.  This goal is probably to hit 200 million units if it wants to keep driving the stock.  We think this may be more of an iPhone-esque iPod, but without the phone.  So we’d be looking for more touch screen and hopefully some more Wi-Fi features.  We’ll know in a few hours.  Here is what some of our tech friends are saying around the web today:

Business 2.0: wide-screen, touch-sensitive iPod, iPod nano with a larger screen, iPod Shuffle with more memory for the same price….

Engadget: Rick Rubin proclaims "the iPod will be obsolete"
Apple to unleash "The Circle" concept tomorrow?

Newsday.com: What’s coming next from Apple?

CNET: "The iPod is growing up: If Apple really is putting a version of Mac OS X in a new iPod, presumably it has more in mind than showing high-quality reruns of The Hills."

Think Secret: Touch-screen iPod to take center stage

San Francisco Chronicle: What news awaits the Apple faithful?
Speculation centers on redesigned iPods, expanded content offerings on iTunes

After the recent Zune price cuts, you have to wonder if Microsoft (NASDAQ:MSFT) is holding on to this space with looser hands and maybe just as a hobby.  And as far as Creative Tech (NASDAQ:CREAF), everyone now only asks "Who?".

Jon C. Ogg
September 5, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Posted on: September 5, 2007 – 8:49 am in Consumer Electronics, , , , , , , , , ,

AtheroGenics Gets Knocked Down

Drug developer AtheroGenics (AGIX) said Wednesday its failed heart-drug candidate showed signs it may be effective as an oral anti-diabetic drug

The company is currently recruiting patients for a Phase III clinical trial on the drug candidate

Wall St. seemed to think that the news put any recovery at the company almost out of reach. Its shares dropped 19% to $2.44. They have a 52-week high of $15.70.

Douglas A. McIntyre

Posted on: September 5, 2007 – 8:41 am in Biotech,

Mortgage Impact on GOOG, YHOO, RATE, TWX–OpCo

From Silicon Alley Insider

Oppenheimer analyst Sandeep Aggarwal has weighed in on the mortgage-impact-on-online-advertising debate with a careful, lengthy analysis.  Despite cutting estimates on Google (GOOG), Yahoo (YHOO), and other Internet leaders, Aggarwal remains "cautiously optimistic" about the mortgage situation.  As described here, after performing a similar analysis, we remain cautiously pessimistic.  The key differences between Aggarwal’s analysis and ours are:  continued here…

Posted on: September 5, 2007 – 8:29 am in Internet

Applix Becoming a Cognos Unit (APLX, COGN)

Cognos Inc. (COGN) and Applix Inc. (APLX) have announced a definitive agreement for Cognos to acquire Applix in a cash acquisition valued at $17.87 per share.  This equates to $339 million, or about $306 million net after you back out the Applix cash on hand.

Applix, Inc. provides business performance management and business intelligence applications, which is roughly in the same spots as Cognos.  Another business intelligence software company gets gobbled up.

The transaction is of course subject to regulatory approvals and other customary closing conditions, although there should not be any regulatory hurdles here if you consider the size. Cognos expects the acquisition to be completed in the fourth calendar quarter of 2007.

Cognos shares are indicated down 2% pre-market on the dilution expected, although this is not even 10% of the size of Cognos.  Applix shares are up 22% at $17.60 pre-market, which is less than 2% short of the total cash consideration.  Applix’s prior 52-week high was $17.73, and that is up more than 100% from the $8.00 lows.  Considering Applix stock traded well under $5.00 as recently as 2005, this should be a done deal where all holders make money on it.

Jon C. Ogg
September 5, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Posted on: September 5, 2007 – 8:03 am in Mergers and Buy Outs, Software, , , , ,

Firings Sky-Rocket

Challenger, Gray & Christmas says that announced lay-offs rose 85% from July and August, driven by job cuts in the financial and mortgage brokerage industries.

Financial job cuts totaled 35,752 in August, the highest monthly total for the industry since Challenger, Gray & Christmas began tracking in 1993, the firm said

If this keeps up, there’s going to be a recession.

Douglas A. McIntyre

Posted on: September 5, 2007 – 7:06 am in Economy

Pre-Market Analyst Calls (September 5, 2007)

BA started as Hold at Deutsche Bank.
BP raised to Outperform at Sanford Bernstein.
BRKL cut to Mkt Perform at FBR.
CHKP raised to Outperform at FBR.
CPHD cut to Neutral at UBS.
CS cut to Equal Weight at Lehman.
DB cut to Underweight at Lehman.
DHX started as Overweight at JPMorgan.
DPZ started as Buy at Citigroup.
ELN started as Mkt Perform at Piper Jaffray.
GR started as Buy at Deutsche Bank.
IFX raised to Outperform at Credit Suisse.
IMCL started as Outperform at Piper Jaffray.
LULU started as Mkt Perform at Wachovia; started as Outperform at CIBC.
KLIC started as Neutral at B of A.
NSTR started as Outperform at RBC.
OMTR started as Outperform at RBC.
PCS raised to Buy at Jefferies.
PWRD started as Outperform at Credit Suisse.
RL started as Buy at Citigroup.
SIMO started as Outperform at CIBC.
STLD raised to Buy at UBS.
TLEO started as Outperform at RBC.
TPX raised to Overweight at JPMorgan.
TRID started as Buy at Deutsche Bank.
VCLK raised to Buy at Citigroup.

Jon C. Ogg
September 5, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Posted on: September 5, 2007 – 6:57 am in Analyst Calls